FRESH KIST PRODUCE, L.L.C. v. CHOI CORPORATION

The opinion of the court was delivered by: JOHN FACCIOLA, Magistrate Judge

MEMORANDUM ORDER

In Judge Urbina's Order of July 31, 2002, he directed JCW to
place, within 60 days of the date of the Order, $59,189.40 in the
court's registry. Seven months later, on March 10, 2003, Judge
Urbina issued a ruling on the issue of pre-judgment interest,
stating the following: "[P]laintiff is entitled to pre-judgment
interest from the date of the PACA violation through the date of
the entry of the court's judgment . . . JCW must pay interest on
all funds received from WWP on or after June 5, 2001. Interest is
due from the date JCW received the post June 4, 2001 payments
from WWP up to July 31, 2002, the date of the court's Memorandum
Opinion ordering disgorgement, and shall be paid at the statutory
rate. 28 U.S.C.A. § 1961." Fresh Kist Produce, LLC v. Choi Corp.
Inc., 251 F. Supp. 2d 138, 143 (D.D.C. 2003). On March 31, 2003,
Judge Urbina granted JCW's emergency motion to stay the judgment
pending JCW's motion to certify judgment as final. Finally, on
May 20, 2003, Judge Urbina denied JCW's motion to certify
judgment as final and, on March 15, 2004, referred the issue of
disbursement to me.

On March 24, 2005, after inquiring of the Court's Finance
Office the exact amount contained within the Court Registry, I
ordered JCW to deposit an additional $1,764.95, upon the mistaken belief that the $57,424.45 that had been deposited on
October 1, 2001 was related to the $59,189.40 amount referenced
by Judge Urbina in his orders. Following the parties most recent
joint statement, dated April 22, 2005, I now understand that the
original $57,189.40 was actually funds frozen in the WWP accounts
under the TRO issued earlier in this case and deposited in the
Court's Registry for disbursement to the PACA trustees. Thus, as
of today's date, the Court's Registry contains a total principal
amount of $128,371.35.

Interest calculations will be divided into three distinct time
periods. The first time period is that between the seven dates
JCW received post June 4, 2001 payments from WWP up to and July
31, 2002 order. Interest for that period of time will be
calculated at the rate of 1.88%.*fn1

The second time period is between July 31, 2002 and September
30, 2002, during which Judge Urbina granted JCW 60 days to
deposit the payments in an interest bearing account. I shall read
Judge Urbina's order strictly, as I have previously, to require
that interest only accumulate during the period from the receipt
of payments until July 31, 2002 as Judge Urbina so carefully
indicated. Fresh Kist Produce, LLC v. Choi Corp., Inc.,
251 F. Supp. 2d 138, 143-44 (D.D.C. 2003). He can, of course, correct
that if I have misinterpreted him but I believe it presumptuous
for me to grant an award of interest for a period of time, July
31, 2002 to September 30, 2002, when he defined so precisely the
period of time for which he was awarding pre-judgment interest
and that did not include the 60 days he gave JCW to deposit the
money in the registry.*fn2

The third period of time is between September 30, 2002 and
March 29, 2005, the date JCW deposited the $59,189.40 it owed to
the Court's Registry. We now know that at some point, JCW's
counsel deposited the $59,189.40 "into JCW's counsel's trust
account pending appeal of the disgorgement order, where [the
funds] have remained until [they] were deposited with the court."
Joint Statement to Clarify Payments Received and Interest Due
from Defendant, J.C. Watson, Inc., at 5, ¶ 3. We therefore know
that from some unstated date until the date of deposit, March 29,
2005, the funds were in an interest bearing account. I am hard
pressed to understand how JCW could claim any entitlement to the
interest that was earned. It was the central thrust of Judge
Urbina's decision*fn3 that JCW be impressed with a trust for
the benefit of all WWP's creditors upon JCW's receipt of payments
from WWP in payment of JCW's own bills. It would be a perversion
of Judge Urbina's opinion to conclude that, while the principal,
the payments JCW received, is impressed with a trust for the
benefit of all the PACA creditors, the interest that principal
earned in an interest bearing accounting is not. I appreciate
that JCW has made and will continue to make principled arguments
against such a trust but Judge Urbina has rejected those
arguments and held that such a trust exists. If a trust existed
as to the payments JCW received in favor of the all the PACA
creditors, that trust must, as matter of law and logic, extend
with the same force to the interest earned on the corpus as it
did to the corpus itself. I will therefore require JCW will submit documentation as to
the amount of interest it actually earned on the money during
that period. If that amount is the same or greater than the
interest the money would have earned had it been in the Court's
Registry since September 30, 2002, the greater amount will be
added to the corpus for distribution to the PACA creditors and
there will be no need to do anything more. If, on the other hand,
the amount of interest actually earned is less than the interest
the money would have earned had it been in the Court's Registry
since September 30, 2002, it may be necessary for the parties to
brief the question raised implicitly by JCW's submission: does
the stay of the judgment ordered on March 31, 2003 have any
impact on the award of post-judgement interest?

In that context, I must specifically reject JCW's contention
that Judge Urbina and I have rejected any award of post-judgement
interest.

As to Judge Urbina, JCW points to page 10 of the Judge's March
10, 2003 Memorandum Opinion which now appears at
251 F. Supp. 2d at 143. In that section of his opinion, Judge Urbina spoke only
as to pre-judgement interest. That discussion cannot possibly be
read as either an express or implied rejection of a demand for
post-judgement interest.

As to myself, the portion cited by JCW in support of its
contention that I have rejected Fresh-Kist's demand for
post-judgment interest now appears at 362 F. Supp. 118 at
___.*fn4 In that portion of the opinion, I was strictly
interpreting the award of interest that Judge Urbina had
carefully defined, namely, interest on all funds received from
WWP from June 4, 2001 to July 31, 2002, and thereby rejected
Fresh Kist's claim that Judge Urbina's order in itself authorized the award of post-judgment interest. My statement concerning the
meaning of that order was not intended and should not be read to
reject Fresh-Kist's claim for post-judgment interest that is
based not on that order but upon a statute,
28 U.S.C. § 1961.*fn5

It is therefore, hereby,

ORDERED that on or by June 5, 2005, JCW will submit
certification by its counsel, supported by adequate documentation
in the form of a bank statement or similar documents as to the
amount of interest earned on the $59,189.40 amount in the period
between September 30, 2002 and March 29, 2005.

It is further, hereby,

ORDERED that counsel for the parties will meet and confer to
ascertain if they can agree as to the proper rate and amount of
interest that the $59,189.40 would have earned had it been
deposited in the Court Registry on September 30, 2002 and been
withdrawn on March 29, 2005. If they can, they will file a
stipulation memorializing their agreement. If they cannot, they
will file a joint submission setting forth their opposing views.
By engaging in this process, JCW does not waive its right to
claim that the PACA creditors are not entitled to post-judgment
interest under 28 U.S.C. § 1961 but ...

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